Lawsuit counterclaim: Fort Collins breached software development agreement

FORT COLLINS — A lawsuit to recover payments that the city of Fort Collins made to a utility billing software provider has been moved to U.S. District Court in Denver, and a counterclaim from the software company seeks at least $6.3 million in damages.

Fort Collins contracted with Open International LLC and Open Investments LLC in 2018 to build new billing software for the city’s new Connexion broadband utility and to replace the city’s existing utility billing software.

The contract was for $7.3 million. By the time the city pulled the plug on the deal, it had spent $8.6 million and didn’t have a fully functioning billing system. The city filed suit July 2, 2021, claiming that Open breached its contract with the city, and sought return of all amounts paid so far.

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Open International contended in its response and counterclaim that the contractual breaches resulted from the inability of Fort Collins to properly manage the software installation, the  inability to assign enough qualified people to the project, and a revolving door of project managers. It said that Fort Collins officials admitted as much to its City Council.

“The city promised to collaborate and provide adequate staffing,” the lawsuit counterclaim said. “But the city did not live up to its promises. … It failed to assign adequate staff, missing as many as 10 critical IT and customer-connection specialists at a given time.”

Open also contended in the counterclaim that the city “added all-new, unscoped functionalities to the project that, according to the city, inserted a ‘significant amount of complexity’ that Open had not agreed to.”

Open International also said in its counterclaim that the city’s lawsuit “tainted Open’s otherwise sterling reputation.”

The counterclaim seeks dismissal of the city’s lawsuit and an award of damages “in an amount to be proven at trial, but not less than $6.3 million…” 

The city in its response to the counterclaim said “the city performed its obligations and that Open materially breached the parties’ agreements.”

A court date has not been set.

City of Fort Collins v. Open International LLC was originally filed as 2021cv30475 in Larimer County District Court. It has since been moved to U.S. District Court in Denver, and its new case number is 21cv02063.